Nortel Networks comes to Interop Las Vegas this week with an announcement of a new data center core switch designed to go toe-to-toe with Cisco Systems' Nexus 7000. But Nortel faces a hard sell trying to convince enterprises to invest in infrastructure from a company in Chapter 11 bankruptcy protection.
Despite some uneasy feelings among the company's customers, Nortel executives are confident that the firm can compete in enterprise networking.
"If you put the pieces together in terms of the genetics of this company, and the solutions we've put together, Nortel really sums up to the strongest and most relevant player going forward," said John McHugh, vice president of Nortel's Enterprise Data Solutions division. "What we're going to do is highlight how [our] commitment is manifesting itself in terms of contributions."
The new crown jewel of Nortel's contributions to enterprise networks will be on display at Interop this week: the Nortel Virtual Services Platform (VSP) 9000. Nortel spent more than $200 million in research and development costs on the new switch, according to McHugh. It won't be available on the market until next year.
Nortel is positioning the VSP 9000, when it finally does see the light of day, against Cisco's Nexus 7000 and similar products from Extreme, Brocade and Juniper, which are all pushing the 100 Gbps mark.
One of the VSP 9000's distinguishing features is its focus on virtualization, which uses Nortel's Split Multi-Link Trunking (SMLT) technology to balance loads across a network with a minimum of fuss. Unlike traditional Multi-Link Trunking (MLT), SMLT allows link aggregation across two physical switches. With the VSP 9000, this technology can now be deployed in data center networks, where uptime is critical.
The VSP 9000 can also support up to 240 10 Gbps Ethernet ports per rack with room for three chassis per rack, scaling up to a 27 Tbps switching architecture in a single chassis or more than 1000 Tbps in a quad switch-cluster architecture.
The IPv4 forwarding rate is 970 Mbps per VSP 9000 system. It is designed to scale up to a 27 Tbps switching architecture in a single chassis or more than 100 Tbps in a quad switch-cluster architecture.
"This product is a good, solid product," said Zeus Kerravala, senior vice president with Yankee Group. He said that bringing the trunking technology into play was a particularly smart move because the feature has been around for years but it has been tough to demonstrate its value, until now, when brought to the level of the data center, where such uptime and load balancing has obvious benefits.
It's an advantage that Nortel is happy to capitalize on.
"What we're going to assert and defend at Interop is why we're relevant and important as customers consider suppliers," McHugh said.
But exactly how relevant Nortel is to the enterprise remains an open question.
"If you want to use a sports analogy, they're down 3-0 in a 7-game series," Kerravala said.
Other analysts take an even grimmer view -- that Nortel is simply winding down the shot clock on a game they've already lost.
"They had these programs budgeted before they went into bankruptcy, and they were still spending on those programs, and that's these announcements. But they've lost innovation," said Nick Lippis, CEO for consultancy Lippis Enterprises. "This is the last hoorah, as far as major announcements for them."
Lippis said he had spoken informally with rumored buyers like Avaya and Siemens and these companies indicated that even the possibility of prominent network divisions getting bought up is becoming remote, as competitors are finding it simpler just to take Nortel's former customer base without the hassle of integrating the company's technology.
"I have a hard time seeing how they could be saved," Lippis said, "but they could dwindle into something like a 3Com."
McHugh admitted that customers old and new alike are "wary," but he said the company was continuing to pick up new customers despite all the negative press.
Nortel just finalized a four-year co-selling deal with BT, for example, which covers enterprise networking equipment and services.
"The market is, frankly, taking a pause. While everyone is taking their breath a little bit, we're taking a pit stop with a yellow flag," McHugh said. He predicted that Nortel's enterprise networking business would outgrow the market for the next six quarters. "We have the right values and we are already seeing the effects of that. My quarter two performance is already going to outstrip my quarter one performance."